Plans and Policies

Functional Strategies
Deals with a relatively restricted plan designed to
achieve objectives in a specific functional area,
allocation of resources among different operations
within that functional area and coordination among
different functional areas for optimal contribution to
the achievement of the business and corporate level
objectives.
Vertical Fit
Horizontal Fit
Congruence and
coordination
among strategies at
different level.
Congruence and
coordination among
different strategies at
same level.

Corporate Level strategies
Business Level Strategies
Functional-Level Strategies
Marketing
Plan &
Policies
Financial
Plan &
Policies

Operational
Plan &
Policies

HRM
Plan &
Policies
Information
Management
Plan &
Policies
Functional Plans and Policies
Functional strategies defined in terms of
functional plans and policies-plans or
tactics to implement business strategies- are
made within the guidelines set at the higher
levels.
PLANS are made to select a course of action
while POLICIES are required to act as
guidelines to action
Need for Functional Plans and
Policies
To implement strategic decisions by all parts of an
organization;
To control activities in different functional areas of
business;
To reduce time spent by functional managers in
decision making
To handle similar situations occurring in different
functional areas in a consistent manner;
Coordination across the different functions takes
place
Financial Plans and Policies
1. Sources of Funds: Capital Mix Decisions: Capital
structure, procurement of capital and working capital
borrowings, reserves and surplus, relationship with
lenders, banks and financial institutions.

2. Usage of Funds: Investment or asset-mix decisions:
Capital investment, fixed asset acquisition, current
assets, loan and advances , dividend decisions etc.

3. Management of Funds: The system of finance,
accounting and budgeting, cash, credit and risk
management, cost control and reduction etc.
Marketing Plans and Policies
1. Product: quality, features, choice of models ,
brand names, packaging etc.
2. Pricing: Discount, mode of payment,
allowances, payment period, credit terms etc.
3. Place: Channels to be used, transportation,
logistics and inventory storage management and
coverage of markets etc.
4. Promotion: Advertising, personal selling, sales
promotion and publicity.
Operations Plans and Policies
Production system - capacity, location, layout, product or
service design, work systems, degree of automation, extent of
vertical integration.

Operations Planning and control aggregate production
planning; materials supply; inventory, cost and quality
management; and maintenance of plant and equipment.

Research and development- product development, personnel
and facilities, level of technology used, technology transfer and
absorption, technological collaboration and support.



Personnel Plans and Policies
Personnel System - manpower planning, selection,
development, compensation, communication and appraisal.

Organizational and employee characteristics corporate
image, quality of managers, staff and workers, perception about
and image of the organization as an employer, availability of
development opportunities for employees, working conditions.

Industrial Relations union-management relationship,
collective bargaining, safety, welfare and security, employee
satisfaction and morale.

Information Management Plans and
Policies
Acquisition and retention of information- sources, quantity,
quality and timeliness of information, retention capacity and
security of information.

Processing and synthesis of information database
management, computer systems, software capability and the
ability to synthesize information.

Integrative, Systemic and supportive factors Availability
of IT infrastructure, its relevance and compatibility to
organizational needs, upgradation of facilities, willingness to
invest in state-of-the-art systems, availability of computer
professionals and top management support.

Plans and Policies of Public sector banks
The public sector banks (the State Bank group and the
nationalized banks) had to face a tough challenge
when the new private sector banks made their entry in
early nineties.

The new banks had the benefit of starting on a clean
slate and had started with state-of-the-art technology
which in turn helped them save on man power costs
and provide better services.

The older banks had not kept up-to-date with
technology and were facing competition of this kind
for the first time.
Introduction of new products and services: new
products include debit cards, credit cards, international
cards, special deposits, demat accounts and any-where-
banking. Some of the new services include round-the-clock
phone-banking, Automated Teller Machines (ATMs), inter-
city, inter-branch banking, net-banking and bill payment
services.
Computerisation and networking of branches: Many
of these branches were also networked so that their
customers could be offered any-time, any-where banking
services.
Risk Management and Capital Adequacy: Many public
sector banks were saddled with large non-performing
assets (NPAs) and suffered from low capital adequacy.
Banks have since put in place stringent Risk Management
Systems to address not only credit risk, but also market risk
and other operational risks.
References
http://www.etstrategicmarketing.com/Smmarch-
april04/art1-1-2.html
http://www.financialexpress.com/news/sbi-plans-
marketing-division-global-consultant-to-formulate-
strategy/57636/
http://www.thehindubusinessline.com/2007/09/07/st
ories/2007090752290600.htm
Strategic Management and Business Policy by Azhar
Kazmi